Taiwan Semiconductor Manufacturing Company just proved that the AI chip boom isn’t slowing down. First-quarter revenue hit T$1.134 trillion ($35.71 billion), surging 35% year-over-year and beating analyst estimates. This is the company that manufactures chips for NVIDIA, Apple, AMD, and virtually every major tech company on the planet.
The numbers matter beyond just TSMC. When the world’s largest contract chipmaker posts a 35% revenue increase, it tells us something fundamental about global demand for advanced semiconductors. AI infrastructure spending isn’t decelerating — it’s accelerating.
The Geopolitical Wildcard
But there’s a shadow over these numbers that investors can’t ignore: Taiwan. The island sits 100 miles off the coast of China, and the ongoing Iran conflict has reminded everyone what happens when a critical geographic chokepoint gets disrupted. The Strait of Hormuz bottleneck sent oil from $70 to over $100. A Taiwan Strait crisis would make that look trivial.
TSMC manufactures roughly 90% of the world’s most advanced chips. There is no backup. Intel’s Terafab project with Elon Musk is years from meaningful production. Samsung’s foundry business is a distant second. If anything disrupts TSMC’s operations, the global economy doesn’t just slow down — it stops.
What Smart Money Is Doing
Despite the geopolitical risk, institutional investors are adding to their TSMC positions. Our Smart Money Tracker shows Warren Buffett’s Berkshire Hathaway sold its TSMC stake in 2023 citing geopolitical concerns — but multiple other tracked managers have been building positions throughout 2025 and into 2026.
The stock trades at roughly 22x forward earnings, which is reasonable for a company growing revenue at 35%. For comparison, NVIDIA trades at over 30x, and AMD at 25x. TSMC is arguably the cheapest way to play the AI infrastructure buildout, with the caveat that you’re also buying Taiwan risk.
The Bottom Line
TSMC’s results confirm that AI spending is real, growing, and not a bubble — at least not yet. The question isn’t whether chips will be in demand. The question is whether the supply chain that produces them can survive the geopolitical tensions that are reshaping the world in 2026.
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